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Built to Enjoy: Aptify CEO Amith Nagarajan (Part 4)

Sramana: Two years into the company, you started to get consulting revenues. What was the ramp from that revenue from those projects, and how did you staff them?

Amith Nagarajan I don’t remember the exact revenue amounts. I know in 1996 we achieved over 1 million dollars in revenue total. We had significant revenue growth in 1996. In terms of staff, we had three full-time employees as well as me and my business partner. Everyone we hired at that time was from Cal Poly, most of them computer science folks.

Consulting businesses are attractive as startups because they are somewhat self-funding once you have a customer on board. The challenge is scalability. We found they were a great way to get us a significant amount of revenue, but we quickly realized that it was limiting based on staff. There are always questions about how you scale quality. We knew we did not want to be a pure play consulting business. We did that work to project the capability of our software tools. >>>

Built to Enjoy: Aptify CEO Amith Nagarajan (Part 3)

Sramana: What was your first product?

Amith Nagarajan The first product suite that I built were component tools that allowed people to build user interfaces more rapidly. Back then it was based purely on Microsoft Windows. It evolved quickly from there.

Sramana: What path did you follow to get the company launched and find your first customers?

Amith Nagarajan I put the first set of products that I built were put out on the Internet as shareware. It is the same idea as the freemium model. I packaged up a set of tools on usenets which were similar to discussion forums. People could use them for free for 30 days and after that timeframe they had to purchase a license key. >>>

Built to Enjoy: Aptify CEO Amith Nagarajan (Part 2)

Sramana: What led you to found the company that early?

Amith Nagarajan There were two things. Early on in life I knew I wanted to be an entrepreneur and I had tried my hand out at a few different types of jobs ranging from banking to retail. I felt that my creativity and my desire for independence made me believe that I was not a good fit for some of those classic roles. I did not succeed in some of my part time jobs in high school because I would get in situations where I really wanted to be independent and use my own creativity. I knew then that I needed to have a business of my own that would afford me that creativity. >>>

Built to Enjoy: Aptify CEO Amith Nagarajan (Part 1)

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Amith Nagarajan co-founded Aptify in 1993. Aptify provides association and membership management software and solutions globally. Prior to founding Aptify, Amith worked in the R&D laboratories at Hewlett-Packard in Palo Alto, California. He graduated from California Polytechnic State University in San Luis Obispo, California, with a concentration in business administration.

Sramana: Amith, let’s start with your background. Where are you from? What were your circumstances growing up? What are the roots of your entrepreneurial journey?

Amith Nagarajan: I am from California. My parents are from India and Europe, so I am a first-generation American who grew up in Silicon Valley. I grew up with a very ordinary middle-class life. I had great opportunities from an education perspective, and I grew up learning a lot about technology. My father was an engineer based in Silicon Valley, so you can imagine I had some insight into that ecosystem. >>>

Building a Fat Startup: From Israel to Silicon Valley, Qwilt CEO Alon Maor’s Journey (Part 7)

Sramana: Let’s talk about strategic partnerships. What kinds of deals do you look for?

Alon Maor: This is an interesting point you are bringing up. A startup should always consider strategic partnerships because it is very difficult to know what the best channels into the market are. Strategic partners can help you get into the market through their existing partners. On the other hand, if you have the opportunity to develop a global independent play in a big market, then dependency on strategic partners can become risky at times.

It is a very sensitive game at times to decide when to pursue a strategic opportunity. Some terms may help you in the near future but prove risky in the long term compared to staying independent. If you are doing something that is compelling and unique, then you should be open and transparent about what you are doing. There is nothing to hide. >>>

Building a Fat Startup: From Israel to Silicon Valley, Qwilt CEO Alon Maor’s Journey (Part 6)

Sramana: You hired two sales people to do market discovery, or essentially to develop a list of 100 potential customers. Talk to me about the characteristics of these two sales people? Typically they need very precise tools to sell. Early stage sales is not quite as clear and this takes a different type of sales person.

Alon Maor: Aside from the sales people, most of the market development has been done by Dan and myself. We reached out to customers directly. I still carry a significant part of selling. I think when you are evangelizing a product that the leaders of the company need to be involved in that process. We were lucky to identify people that have great product skills and have market development skills. They also had experience running large corporate sales teams. It is about finding the right talent. >>>

Building a Fat Startup: From Israel to Silicon Valley, Qwilt CEO Alon Maor’s Journey (Part 5)

Sramana: You were starting your company in Israel and you talked to Silicon Valley VCs. What requirements did they put on you?

Alon Maor: They did not put any location requirements on us. We had the philosophy that if you want to build a global company, then you can have a top-level engineering and product team in Israel, but the corporate team should be in the US. You need to have business development, marketing and sales in the US.

For the first 12 months we ran out of Israel. We are one of the few companies in Israel that achieved Series A investment from two Silicon Valley VC firms without having an Israeli VC firm represented. Part of that was that we connected to angels. Our chairman is a serial entrepreneur who has done 8 startups. >>>

Building a Fat Startup: From Israel to Silicon Valley, Qwilt CEO Alon Maor’s Journey (Part 4)

Sramana: You went to market with 15 carriers. At what point did you start getting them to pay for products?

Alon Maor: We got them to start paying once we had the initial product. That means it had to be a carrier-grade product. They will evaluate the product in a lab. We had a few cases of Tier 1 carriers in the US stating that our product was the most “plug and playable” product they had ever seen and that let us bypass processes in some of the other labs. The reality is that carriers will not go through a deployment without validating that the product is a carrier-grade product. We shipped the initial version of the product 20 months after Series A. >>>